Sale of KHON complicated by neglected paperwork

A PAPERWORK lapse has Indiana-based Emmis Communications Corp. going an extra mile and an extra 60 days for its 112 employees at KHON, the local television station the company is selling.

Emmis failed to timely file a required notice with the state Department of Labor and Industrial Relations before telling its employees that 35 of them would be laid off by the end of next month.

The station's sale to SJL Acquisition LLC, based in California, was to close at 12:01 a.m. today. Joe Moore, lead anchor at KHON, bid an emotional farewell last night to the station's departing senior vice president and general manager, Rick Blangiardi, at the end of the 6 o'clock news. Moore also railed against the "draconian" staff cuts that the new owners are planning to make. (Please see Moore's comments on Page C3.)

Instead of receiving the labor notice 60 days before the completion of the sale of KHON, the state got the notice this week. This does not preclude SJL from terminating employees once KHON's new president and general manager, Joe McNamara, takes the helm on Monday, but it does create some accounting headaches for Emmis.

Blangiardi led an extraordinary all-staff meeting Wednesday afternoon in which staffers were told that they will remain Emmis employees until March 31. After SJL takes over, on top of staffers' regular wages, Emmis will continue to pay employees their previously announced success bonuses, either over time or as a lump sum.

Emmis also will continue to pay for employee health plans including the employees' contributions. Emmis did not divulge the cost of the paperwork faux pas. The workers can opt for SJL health benefits instead of continuing to be covered under Emmis.

"It is our understanding that SJL will offer full benefits to all employees upon closing," said Kate Snedeker, Emmis' director of investor and media relations. It seems unlikely, however, "because they can continue on the Emmis plan and we'll cover the employee contribution."

Officials at SJL, working to rebrand itself as Montecito Broadcast Group LLC, could not be reached.

Customarily it is the seller of a business that notifies the Labor Department of a so-called plant closing, said James Hardway, assistant to labor director Nelson Befitel. "After it had been reported in the paper that they were planning to fire the employees within two months, Director Nelson Befitel directed staff to contact KHON and offer our services," he said.

The purpose of requiring a plant closing notice, or in this case, partial plant closing notice, is to gear up the Labor Department's rapid response team to "go in and meet with employees and provide packets for employees as to what services we provide," such as unemployment insurance, job training and others, "to help them transition faster from the jobs they are losing, to, hopefully a new job," Hardway said.

It is the first time in recent memory that a company has failed to file a notice, "but once it hit the papers, we became aware of it and our main consideration was to assist with employee transition," he said.

The filing of such notices "is required by law, but there really aren't any penalties attached to it."

KHON personnel officials have not yet scheduled a Labor Department session with employees because, as it happens, the employees don't yet know who's going to be laid off.

Their identities are on a list prepared by SJL and delivered to Emmis, which was to let the employees go before it took over under the terms of the sale.

Blangiardi notified Emmis of his intention to step down from his leadership post at the close of the sale, rather than carry out SJL's vision.

Moore expressed hope on behalf of employees that the new owners would also change their minds about the "drastic" cuts and focus on service to the Hawaii community, rather than increasing advertising revenue with a staff that is already performing above industry standards.

Cuts at TV stations SJL has purchased from Emmis in Portland, Ore., and Wichita, Kan., have been across the board and have included on-air staff.

Despite the uncertainty of their future employment, KHON staffers gave Blangiardi a standing ovation during the Wednesday afternoon meeting, according to an attendee who asked not to be identified.

Contacted for comment, Blangiardi described it as, "a great final meeting. A great parting, although regrettably."

Moore said he carefully considered his on-air remarks "before, while and after I wrote it and delivered it, but I don't know; there is a time when you just feel you have to take a stand and say what is right, and needs to be said ... no matter the consequences."

MOORE VENTS ON AIR ABOUT LAYOFFS

KHON anchor Joe Moore's on-air comments last night:

"This has been a difficult day for most of us here at KHON2. It was the final day on the job for our general manager, Rick Blangiardi, who refused to carry out the mass firings of over one-third of our station employees, as ordered by our new owners, who take over tomorrow.

"The firings are not a matter of cutting excess fat to improve efficiency; they will be a butchering of an already lean work force that will remove muscle, bone and vital organs.

"A small percentage of people will be replaced by automation. The rest will severely reduce our ability to serve the community in the manner in which you, and we, have become accustomed.

"The new owners recently changed the name of their company from SJL to Montecito. It is a virtual company with no office building that specializes in buying and selling TV stations.

"Their business plan for KHON2 calls for an immediate, drastic, across-the-board reduction of personnel in order to slash the payroll. ...

"In short, it is not a plan used by a quality broadcast company to foster a long-term commitment to its employees or the viewers it is charged with serving.

"It is the sincere hope of all of us who have worked long and hard to make this TV station what it is today, that the departure of Rick Blangiardi -- who stood up for us, while he was standing tall for quality television -- it is our hope that his departure will not be in vain, and that our new owners will reconsider their draconian plan, and pledge to the people of this state that operating KHON in the best interests of the people of Hawaii is not only their No. 1 goal, but also their No. 1 priority."